Western “liberals” still not getting Modi’s demonetization move.

If you didn’t laugh at their cognitive dissonance … you’d laugh anyway

Cognitive dissonance is the gap between reality and what you would prefer reality to be. That gap gets filled with error and blindness when you can’t face up to what’s actually happening in the world. It’s thinking wishfully, with an edge of psychotic unreason. The Trump hysteria among Clinton Democrats and others in the USA (what Scott Adams calls “Trump Derangement Syndrome”) derives from an unwillingness to accept that their candidate was poisonously unpopular, lost the election, and that this is really for real.

The Leftish Naked Capitalism website, usually excellent on many matters, has been simply appalling in its coverage of India under Modi, and this I also put down to cognitive dissonance. It uncritically prints articles by notorious Congress Party frontmen inaccurate in details and wholly ideological in content.

Western stooges of Indian fake-liberal media and politico types have aligned their Gandhi-Clinton attitudes and agreed to mutually support each other for many years. Now they are both in agony and for its part Naked Capitalism is acting out its part in the nihilistic, post-modern identity politics activism that condemned Modi sight unseen as Adolf Hitler (it’s always Hitler with these dreary people). I wrote a book showing how stupidly wrong that assumption was and I’ve already spent enough time on it.

But this latest idiocy—endorsed by a writer who is normally very good—deserves some scorn (coming right up). I guess this is what happens when you have a fixed point of view, and then you simply apply it to an area you know only scantily, so that you’re ignorant of even very basic facts and end up looking like a fool.

I regard myself as a Liberal in the classic tradition, in favour of individual rights, liberty and free trade; or as Matt Ridley excellently reformulated it in a recent essay, a free-market anti-capitalist. But it’s revealing to find I have nothing in common with these Modi-hating liars who see themselves somehow as liberals, too.

It’s difficult to know where to start with how the Western media has traduced the so-called demonetization in India. I guess facts are the best way to go, unfashionable though that seems to be with the know-alls who hate Modi’s government.

A factual recap, for God’s sake

In November 2016 the 500- and 1000-rupee banknotes were abruptly withdrawn from circulation in India. This created queues at banks, and other inconveniences, but no major economic troubles ensued. I’ve written before about how the prices of groceries in the chowks didn’t go up at all, so supply chains were clearly not disrupted—India’s poor know how to cope, and they were behind Modi all the way. His popularity actually increased during the period.

The ordinary people supported Modi because he had prepared the ground by ensuring that 300 million (and counting) poor Indians had been given online bank accounts so they wouldn’t have to depend on cash—nor any longer on the vulture-like chit-wallahs who would “look after” their banknotes for extortionate fees.

The withdrawal of the notes was prepared in secrecy. Why? Because Modi wanted to help the ordinary Indians and India’s economy, and penalise the two parties guilty of abuse and corruption: rich Indians who profited from bribery and mostly kept their “black money” in cash (typically piles and stacks of 1000-rupee notes), and the Islamic forgers in Pakistan who were trying to undermine the Indian economy by flooding it with fake 500- and 1000-rupee notes. Surprise was vital.

The false way all this was reported was that Modi was doing away with the notes and trying to take India to a cashless, therefore authoritarian system. (In the West that’s apparently a brilliant move for democracy, the same journalists say, but never mind …)

In fact, from the his very first announcement on the subject, Modi had explained carefully and slowly, for the hard to understand (journalists), that the old 500-rupee note and the old-1000 rupee note would very quickly be replaced by new ones, and in addition an entirely new 2000-rupee note would be minted to take account of the larger values of cash Indians were enjoying carrying around these days. I’ve put a photo of the new note at the head of this piece so you can see I am not making all this up. In simple terms: Modi was not demonetizing anything.

Did everybody get that? Not journalists, apparently. Endless articles appeared decrying the “chaos” and the failed experiment in a cashless economy. The Indian government had pledged (yes they had) to have cash levels back to normal quite soon and aimed at a January-February dateline for it. I think they got about 90% of the way there by the end of January. Now in India everything is back to normal, with two important exceptions: the beneficiaries of years of bribery winked at by Congress governments are a lot poorer because their cash became worthless overnight, and the Indian poor are a lot happier with their lot and with Modi. Oh, and a happy by-product is that the Pakistanis have been badly hurt by it too because they cannot forge the new notes.

I know I’m banging my head against a brick wall with all this. To return to the piss-poor article at Naked Capitalism, the idiotic headline was “India’s Demonetization Experiment Fails to Demonetize: Cash Comes Full Circle”. Well, that’s what was supposed to happen all along. I don’t think that anything will ever get through the thick skulls of such fools, so why bother? And yet somehow one must point out lies, I suppose. It goes on:

Demonetization in India has been a debacle, and there is no end to the problems that it has created currently in sight. The best that can be said about it is that it might deter political leaders in other countries think long and hard before initiating similarly ill-conceived, premature efforts to try and nudge transactions away from cash and toward cashless payment systems.

All I can do is refer you back to the colourful photo of that brand-new 2000-rupee note.

“Reform, Perform, Transform”

Meanwhile, in defiance of the fake-liberal gloomsters, India’s economy marches ever upwards and its business-friendly environment continues to improve. A happier headline a few weeks ago related to how India has moved up in the ease-of-doing-business rankings since Modi was elected prime minister.

India’s old ranking, one week after Modi took office in 2014, was a pathetic 142nd, almost like some corrupt third-world state … Since then, it’s just been announced, India has rocketed 42 places to sit at 100, and that it is one of the ten most improved economies, especially in the areas of Resolving Insolvency (136 to 103), Paying Taxes (172 to 119 ), Getting Credit (44 to 29), Enforcing Contracts (172 to 164), Protecting Minority Investors (13 to 4) and Construction Permits (185 to 181).

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I am Andy Marino, biographer of Narendra Modi, and this site is designed to explain Indian economics and finance, government and politics, culture and history to Western investors, businessmen and entrepreneurs. For more information, click on my Intro section.